Economists cheer up (slightly) on Brazil

Financial Times, 06/13/2016

Slowly and ever so cautiously, economists are daring to let themselves to get optimistic about Latin America’s largest economy again.

For the third week in a row, economists have upped their 2016 and 2017 outlook on Brazil. The consensus of the latest weekly survey published by the Brazilian central bank now sees the economy shrinking by 3.6 per cent this year and growing 1 per cent next year. Just two weeks ago, they were expecting gross domestic product to contract 3.81 per cent this year, roughly the same as in 2015 and to grow 0.55 per cent next year.

The upward revisions are a fillip for the new government led by interim president Michel Temer, who took over from president Dilma Rousseff last month after congress approved impeachment proceedings against her.

Read More…

 

Road to Rio: Brazil’s troubled path to summer Olympics

Carter Dougherty   – Newsweek, 04/17/16

Pinning business woes on a feckless government can sometimes stretch the bounds of logic, but Robert Mangels can make a pretty persuasive case from where he’s sitting in São Paulo.

The CEO of Mangels Industrial, a metalworking company, Mangels steered his family business into “judicial recuperation”—Brazil’s version of the U.S. Bankruptcy Code’s Chapter 11—in late 2013. He then squeaked through 2015 by paying the firm’s creditors on time and paying careful attention to the bottom line.

Mangels, whose business activities include making aluminum wheels for Toyota vehicles and refurbishing steel propane tanks, watched the Brazilian economy begin to crater in 2014 as prosecutors crept ever closer toward implicating President Dilma Rousseff in an unimaginably wide-ranging corruption scandal that has ensnared dozens of Brazil’s senior politicians. To him, cause and effect appear pretty obvious.

Read More…

 

Brazilian billionaire Joseph Safra charged with corruption

Financial Times – Joe Leahy, 04/01/2016

Brazilian prosecutors have filed corruption charges against billionaire Joseph Safra, said by Fortune magazine to be the world’s richest banker, and five others for involvement in an alleged scheme to pay off government tax auditors.

The financier, who owns London’s Norman Foster-designed “Gherkin” skyscraper, is alleged to have known of a plan by executives at his banking group in Brazil to pay R$15.3m in bribes to help reduce tax debts today amounting to R$1.8bn.

“The criminal intentions of the group is made clear by the various conversations and exchanges of messages cited in the indictment,” the prosecutors said in a statement signed in Brasília.

Brazil opens investigation into McDonald’s

A federal prosecutor in Brazil on Thursday opened a criminal investigation into McDonald’s and its Latin American master franchise owner, Arcos Dorados Holdings, saying that they and related entities may have engaged in “fiscal and economic crimes.”

The prosecutor, Marcos José Gomes Corrêa, is looking into whether McDonald’s and Arcos, which subfranchises McDonald’s restaurants in Latin America, have failed to comply with tax and other laws in Brazil, in addition to possible violations of the country’s franchise law.

The possible tax law violations include accusations made by Brazilian labor unions that Arcos paid bribes to government officials in return for favors from Brazil’s tax collection regulator.

Read More…

Insight: Lost in translation – Wal-Mart stumbles hard in Brazil

Brad Haynes, Nathan Layne – Reuters, 02/17/2016

When Wal-Mart Stores Inc. (WMT.N) first expanded into Brazil’s midwestern farm-belt city of Campo Grande seven years ago, the economy was booming and executives were eager to open stores even in sub-prime locations on one-way streets heading out of town.

It didn’t last. At the end of December, the U.S. retailer closed both of its Maxxi brand cash-and-carry stores in Campo Grande as part of a restructuring that shuttered 60 locations across Brazil, including some Supercenters. Shoppers said the stores could not compete on assortment, price or location.

“It was never clear who Maxxi was for. It wasn’t cheap enough for the poor. But there was no appeal for the middle class,” said Ordecy Gossler, 40, a public accountant filling his cart with cleaning supplies and toilet paper at Atacadão, a rival chain run by France’s Carrefour (CARR.PA).

Read more…

 

Brazil’s Vale won’t be ‘active’ player in CSA sale process

Rogerio Jelmayer – Fox Business/Dow Jones Newswires, 05/03/2013

Brazilian mining giant Vale SA (VALE, VALE5.BR) won’t play an “active” role in the change of ownership at Companhia Siderurgica do Atlantico, a loss-making steel mill in Rio de Janeiro state, and is only interested in maintaining its existing supply contracts with the mill.

“Vale just wants to maintain the rights that are assured by the contracts. We don’t envisage being active players in the process,” the company said in an emailed statement.

Vale owns a 26.87% stake in Companhia Siderurgica do Atlantico, a EUR5.2 billion joint venture with German steelmaker ThyssenKrupp AG (TYEKY, TKA.XE), which put its stake in the steelmaker up for sale after losing billions of dollars on the projects in recent years.

Brazil launches 4G wireless service with few smartphone options

Sergio Spagnuolo – Reuters/Yahoo News, 04/17/2013

As Brazil rushes to introduce a blazing-fast fourth-generation wireless network before the 2014 World Cup, fewer than a dozen compatible smartphones will be available in stores, compared with the hundreds of models on sale worldwide.

And the phones will be operational in a just few cities at first.

The launch of 4G services is crucial for Brazil to modernize its thinly stretched telecommunications infrastructure and ease the burden on 3G networks, which currently support over 68 million data users, according to regulator Anatel.

Read more…